Nexon: Japanese video game giant Nexon prepares for westward expansion

Tokyo/Los Angeles: The Japanese creator of one of the longest-running online role-playing games, whose most popular video game has attracted nearly a billion registered users, is gearing up for global expansion and has its sights set on the West.

Nexon Co Ltd – little known outside of Asia – is one of the world’s top 10 video game companies by market capitalization; its $22 billion valuation is higher than that of Take-Two Interactive, the company behind “Grand Theft Auto” or Roblox.

Last year, it completed the acquisition of Stockholm-based Embark Studios, whose founder spearheaded development of the hit “Battlefield” franchise. In 2022, he invested $400 million for a minority stake in AGBO, the independent studio founded by Anthony and Joe Russo, the creative duo that made Marvel’s “Avengers: Endgame” and “Avengers: Infinity War.”

“The overall idea with this is to combine what we’re really good at – making a virtual world last and grow forever – with what they’re really good at,” Nexon chief executive Owen Mahoney told Reuters. .

Nexon is working with AGBO to explore ways to expand its game franchises into film or television and to develop virtual worlds or video games inspired by AGBO’s films.

“Our vision, which aligns well with that of Nexon, recognizes that the public expects true immersion in the intellectual property that matters most to them,” said Jason Bergsman, CEO of AGBO.

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The two companies are in preliminary talks on adapting Nexon franchises such as “MapleStory” and “Dungeon and Fighter”, which have a rich lore and passionate fanbases. These talks are still at the preliminary stage, warns a source with direct knowledge of the situation.

They also discuss a game or virtual world inspired by “Battle of the Planets,” an iconic 1970s Japanese anime series that AGBO is developing as a feature film.

Mahoney hopes to leverage Nexon’s experience in operating “live games” – updating titles while they’re running – to launch big-budget titles with a Western sensibility, such as the free-to-play shooter “ARC Raiders”, from Embark Studios.

Embark founder Patrick Soderlund once ran Dice, the company that developed the “Battlefield” franchise and was acquired by Electronic Arts when Mahoney led mergers and acquisitions there.

Pioneer of the virtual world

Nexon has assiduously avoided the “metaverse” frenzy that has gripped tech giants Microsoft and Facebook.

“Nobody can define it and more importantly they can’t define why it’s so great,” Mahoney said. “It’s a big nothing burger.”

Nexon was an early adopter of features that have become mainstream in the industry, including in-game virtual currencies and the free-to-play business model.

These features have been deployed in games such as Nexon’s “KartRider” racing game, which has been running for nearly two decades – one of what the company calls its “everlasting franchises”.

Its most popular franchise, the arcade-style fighting game ‘Dungeon and Fighter’, has grossed over $20 billion since 2005, more than the combined box office receipts of the ‘Star Wars’ or ‘Harry’ film franchises. Potter”.

A big new challenge as part of Nexon’s expansion will be generating returns from bigger budget Western games.

“Nexon doesn’t have a great track record of operating photorealistic games for hardcore gamers,” Citigroup analysts wrote in March, kicking the title’s coverage to “neutral.”

Nexon wants to control the cost of developing titles at a time when budgets exceed $100 million. For example, it uses machine learning technology to animate certain character actions instead of relying on workers.

“I don’t care what happens in the first quarter or two,” Mahoney said. “What matters to me is what happens from the second to the twentieth year.”

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